New Zealand’s government said the fiscal and economic impact of the coronavirus pandemic will be less severe than first feared as its decision to impose one of the world’s strictest lockdowns pays off.
Economic growth will recover more rapidly while budget deficits and net debt will be much lower than expected just three months ago, Finance Minister Grant Robertson said Wednesday in Wellington when presenting the half-year fiscal and economic update. Unemployment will now peak at 6.9 per cent at the end of next year rather than the 7.8 per cent predicted in September.
“The government’s decision to act quickly in response to the global COVID-19 pandemic has contributed to a better than expected economic recovery,” Robertson said. “While New Zealand’s economy contracted in 2020, it is forecast to rebound strongly in 2021, outperforming regions we compare ourselves to like the euro zone, the United Kingdom and Japan.”
New Zealand’s strategy to eliminate COVID-19 from the community saw it impose a harsh nationwide lockdown that tipped the economy into recession, but its success allowed a relatively quick resumption of normal life. Today, as many countries face new lockdowns, New Zealanders head into the Christmas vacation free of any restrictions.
While gross domestic product plunged a record 12.2 per cent in the second quarter, economists predict it surged by 12.9 per cent in the third, according to a Bloomberg survey. That data is due tomorrow.
The recovery is expected to continue next year, with the Treasury Department forecasting annual average growth of 1.5 per cent in the year through June 2021. Three months ago it forecast a 0.5 per cent contraction.
Budget deficits are now seen falling from NZ$21.6 billion, or 6.7 per cent of GDP next year to NZ$4.2 billion, or one per cent of GDP, in 2025. That’s much lower than the deficit track in September’s pre-election fiscal update, which saw a gap of NZ$31.7 billion or 10.5 per cent of GDP in 2021.
Net debt is now seen peaking at 52.6 per cent of GDP in 2023 compared with the previous forecast of 55.3 per cent in 2024. This includes the Reserve Bank’s various alternative monetary policy measures, which Treasury said could be looked through as they should reverse out over time. When the RBNZ’s liabilities are excluded, net debt is forecast at 44.8 per cent of GDP in 2023.
The better outlook has allowed the government to reduce its expected borrowing. The bond program for 2020-21 has been cut by NZ$5 billion to NZ$45 billion, while the following three years have also been reduced by NZ$5 billion to NZ$30 billion each.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
